Sotherly Hotels redeems series A cumulative preferreds at $2.7 million

By Marisa Wong

Madison, Wis., Aug. 5 - Sotherly Hotels Inc. said it redeemed about 2,460 shares of its series A cumulative redeemable preferred stock for a total redemption price of $2.7 million.

The company said it also paid accrued dividends. The series A preferreds carry a 12% cumulative dividend.

The company also announced that it executed a $15.6 million secured loan with CIBC, Inc., proceeds of which were used to redeem a portion of the series A preferreds, to repay an existing mortgage on the DoubleTree by Hilton Raleigh Brownstone-University Hotel in Raleigh, N.C., and for general corporate purposes.

The five-year loan, which is collateralized by a first mortgage on the DoubleTree, has a fixed interest rate of 4.78% and amortizes on a 30-year schedule.

Andrew M. Sims, Sotherly Hotels chief executive officer, commented in a press release, "With the successful completion of this transaction we continue to execute on our balance sheet restructuring strategy, whereby we are taking advantage of historically low interest rates in order to continue the orderly pay down of our preferred stock and lower our overall cost of capital."

Sotherly Hotels, formerly MHI Hospitality Corp., is a lodging real estate investment trust based in Williamsburg, Va.

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